tv [untitled] November 10, 2012 11:30am-12:00pm PST
buying and the destruction of democracy is what they expect for their money. it once would have been considered unthinkable that the board of supervisors would meet on election day, respect for the power of the vote is democratic accountability itself, the destruction of the truth is the destruction of democracy itself, and that's why the lies cost more than the money. please -- >> president chiu: thank you. next speaker. >> good afternoon, supervisors. my name's douglas -- i've lived in san francisco for 60 years. i would like to say that i am very disappointed, this thursday, the committee hearing for gao has been canceled. i would like to offer a suggestion for are a new name of the committee. why don't we call it the government absent and
obstruction of justice committee. that's just a suggestion. so you don't have to take it seriously. secondly, i noticed that after the mirkarimi decision, the mayor has been saying some very interesting things. i thought it was pretty interesting about the orange jacket. so we'll leave that alone. but he did suggest, in his speech in front of the parade, that everybody is supposed to be working together. so i propose that the mayor and the sheriff have a public handshake, and show that there's no hard feelings. and if that doesn't happen, then i would like a committee hearing by the board of supervisors to see why it's not happening. also, i would like to suggest that, in order for the city operations committee, since they took the time to hold a hearing on the nudity, why there is still no public discussion of a
dead gay man named joe samolstan that died under controversial circumstances at san francisco general hospital in 1999. i guess his life isn't worth a death discussion right now while we can argue back and forth about -- thank you. >> president chiu: next speaker. >> good afternoon, board and president chiu. if i haven't been tired i might have contacted the san francisco giants parade organizer because after she sang san francisco in the beginning opening, i would have followed it through and came in with -- ♪ california, here i come, right back where i started from, where -- of flowers bloom in the sun at dawning each bird is singing -- don't be late, that's why -- the
san francisco giants, aren't they great ♪ open up that golden gate, city winning, giants winning, here we come. on the way over i was kind of thinking, it's kind of still kind of sad because -- ♪ you don't bring former supervisor ed jew flowers anymore. ♪ you hardly talk to him anymore when he comes in the door and he talks on the floor ♪ playing with the city's heart, you know it isn't really smart. ♪ the city joker is the only fool, will do anything for you ♪
you'll maybe get another dime. ♪ it ain't going to be a city, a city that really shines. ♪ you know, you know i feel like i need some more, and you want to bring it, bring it some, don't you bring it on the floor. ♪ playing with the city, tony bennett heart, you know it ain't really smart. ♪ the joker is the only city fool that will bring and help you ♪ thanks. >> president chiu: thank you. any other members of the public wish to speak in general public comment? general public comment is ended. madam clerk, could you go to the adoption calendar. >> the clerk: items 18 through 21 are being considered for immediate and unanimous adoption without committee reference and will be acted on by a single roll call vote. it can be considered separately. >> president chiu: would anyone like to sever any of
these items? roll call vote on the adoption calendar. >> clerk calvillo: supervisor cohen, aye. supervisor elsbernd, aye. supervisor ferrell, aye. supervisor kim -- >> president chiu: order please. public comment is over. madam clerk, back to roll call. >> clerk calvillo: kim, aye. supervisor mar, aye. supervisor olague, aye. supervisor wiener, aye. supervisor avalos, aye. supervisor campos, aye. president chiu, aye. supervisor chu, aye. there are 11 ayes. >> president chiu: those motions are approved and resolutions adopted. colleagues, we have a couple of 3 pm special orders. why don't i suggest that we recess until 3 pm. >> prospect the board of supervisors meeting is
>> president chiu: good afternoon. welcome back to the board of supervisors meeting of tuesday, november 6, 2012. madam clerk, could you call our 3 pm special item, item 8 through 11. >> clerk calvillo: the board of supervisors has agreed to sit as a committee of the whole, as they approved file 121080, item 18 on today's agenda to sit for a public hearing for persons interested in adopting resolutions associated with various real property leases located at 110 12th street, stevenson street, and market street. >> president chiu: let's open up this hearing. let me ask first supervisor kim, do you have initial comments you would like to make as the district supervisor or shall we go to the presentations? >> supervisor kim: there is a presentation by john updike and mr. barnes is here from the city administrator's office but we are on a tight timeline to approve these leases for
relocation for several of our department offices from 875 stevenson with an early termination and i believe that the city's administrative office worked really hard to ensure that this didn't have impact on our budget cycle and i appreciate those efforts. >> president chiu: supervisor chu. >> supervisor chu: they explained this to me previously, but in our committee we do have it as a weekly meeting, generally items do get scheduled pretty easily in those committees so i want the department to address the reason it did not go through committee. >> president chiu: why don't we hear from the department of real estate. >> thank you, president chiu. good afternoon. john updike, director of real estate. members of the board, first i want to thank you for holding this hearing on this matter, three items. one is an exit agreement from our current property we occupy to our entry agreements to new properties to replace the
property from which we're leaving. so i'll give you first the basic terms of what is before you and then i'll speak to the issue of timing and why this is before you today in the fashion that its before you. currently, we occupy space at 875 stevenson street. we've been there since approximately 1994, as a temporary location. at one point, leasing 158,000 square feet at 875 stevenson street. we've made concerted effort over the years to move from that location into preferably owned spaces to create a much more tenable expense stream for us, and stabilize our expenses of occupancy. so we have reduced that amount in 2009, we were down to 116,000 square feet and now we're at 81,400 square feet at 875 stevenson street. that property is right behind what's called 1355 market
street, or what's been rebranded as market square, where trirt an --twitter and others have mod into. that resurgence has lit a fuse to move forward with new improvements by the ownership of both buildings, which is forcing the item before you today of an early exit from 875 stevenson. our current lease agreement allows us to remain on the premises until may of 2015. so the one agreement, that has us exiting, would call for an early exit by no later than february 4, 2013. in consideration for that early exit, we've negotiated a payment to cover the cost of the move itself, as well as the increased cost of occupancy because rental rates have increased since we struck the agreement at 875
stevenson. so that's sort of where we're at, and why we're leaving. the other question is where we're going. so we have, at 875 stevenson street our repromail operations, treasurer tax collector, assessor, recorder, business property division, department of public works, bureau of street use and mapping, human resources, department of public works and general services agency, as well as city attorney's office claims division. all within the footprint of 875 stevenson. the majority of those folks would move to one location, 1155 market street where we have negotiated a new lease. 1155 market street was the headquarters location of the sf puc. so you may recall they occupied both that building and the building next door at 1145 market street. so there's no confusion i'll refer to 1155 as the
headquarters location. that building is owned by the lors corporation although you see the agreement is with a limited liability company that is a subsidiary of lors corporation recently purchased within the last two years. we've negotiated what we think is a favorable agreement that is of a term of 10 years at 1155 market street. we do have the right to exit after five years, or after 92 months. so we have two opportunities to decide if there is a better location, or part of a greater plan to consolidate services, we have those exit opportunities from 1155 market street. the initial lease rate is $31.67 a square feet. that jumps in the second year to 39.14 a square foot and then 3% increases per year. the reason for the big jump
between year one and year two is that year one is included a few months of what's considered free rent, and the ownership preferred to simply blend that benefit over the term of the first year. included with that rate is a tenant improvement allowance of $25 a square foot and then ability to amortize or pay for over time a 35 dollar square foot tenant improvement allowance over the initial 10 year term. the second entry agreement to cover the relocation of repromail which was sought to be an inappropriate use at the office building of is 155 market we were fortunate enough to find a location at the intersection of 12th street and south van ness, 110 12th street also
has an address of van ness. it would be single use, a little over 10,000 square feet in size. we believe it's ideally situated to service our repromail operations, has a small parking area/yard and ability for adequate loading and very approximate access to the civic center which is the main client base for repromail operations. that particular lease is a 10 year lease as well, with an exit any time after five years. so we have a continual right to exit the property after the fifth year. the initial rate there is $30.95 a square foot per year. that increases 4% per year. the last one let me speak to briefly the exit from 875 stevenson street, the terms of that agreement are that the city completely vacate the premises by no later than february 4, 2013.
which we are primed to do. if we accomplish that successfully, we will receive payment, over all, two different payments but a sum of 3,250,000. so that's the consideration for the early exit. there is some fairly intense calculations in your board package that shows that that compensation adequately covers our physical cost to move. it covers cubicle refinishing, new cubicle acquisitions were necessary although we're pretty much moving around our exiting furniture. we're trying to make this a green efficient relocation. and covers most importantly the differential in the rent. for the rest of this fiscal year and the full term of next fiscal year. so the budget impact of this move is deferred to fiscal year 14-15. that's somewhat consistent with what we would have faced if we hadn't done this agreement.
so but for this agreement we would remain at 875 stevenson street, where we do not have a renewal option, and in mai of 2015 we would have had to have found a location to move to. so we knew this day was coming. this accelerates that day but it brings to the table a fiscal partner to help ease the fiscal impact of the move. we speak to timing. so the reason this is before you, the nature that it is, as opposed to the normal course of a budget analyst review, budget and finance committee hearing, and then to the full board which frankly would have been my preference, is that we were squeezed, really, on both ends. so we had the ownership of 875 stevenson being very clear to us that that exit date of february 4 was firm, there was no negotiating that. once we negotiated the date we
had, there was no extension possible. and there is a fiscal penalty for every day delay of our exit in this agreement. we will receive less money from shornstein for every day of delay. so if we leave on february 5, that will cost the city $10,000 in reduced revenue from that $3.25 million. it's $10,000 a day for the first week, $20,000 a day for every week thereafter. so clearly there is motivation for us to be timely in our exit. secondly, on the entry, there's only so many days between now and february 4, plus we have -- the worst time of the year to put this all together, during the holiday season. so when the construction schedule was coming together, many of these things working in parallel, we found that, because of the one week window next week, where we do not have a
board meeting, that one week was absolutely critical from a standpoint of ordering furniture and other expenses that the landlord will front as is typical in a landlord-tenant agreement. the landlord will front money on an executed lease, but not on a non-executed lease. so reasonably so, we needed to get this item to this board to see the lease approved before further expenditures would be made by the landlord on our behalf, or really on their behalf in order to secure us as a tenant. so i hope that helps give a little perspective as to the timing. certainly happy to answer any questions you may have about any one of these three agreements. thank you for your time in allowing this process to go as it has. >> president chiu: colleagues, any questions to department staff? supervisor kim. >> supervisor kim: thank you. i had one quick question. this is the second time i've seen, in the lease, us using
kind of a landlord advances to front the tenant improvements at an 8% enterrate. being that we're seeing this over and over again i think several of my colleagues has said this is very high if we do choose to participate, and this came up with the department of environment. i was wondering if the department of real estate is thinking in the future, if there are other ways that we can borrow money for these tenant improvements at a lower interest rate. >> well, that's a very good question, and it's timely. because we are seeing this more and more frequently. and the reason we're seeing it more frequently is that the market is changing and there is less of an allowance provided by landlord than there was when the market was softer. so as this market continues to heat up there is less advantage to a tenant. and because of that, then we have to amortize our improvement costs. the challenge we have is each one of these individual deals is have fairly small so we're not talking about a large sum of
money which we would normally think of in terms of a certificate of participation, or other fiscal mechanism we might have to borrow funds at very competitive rates. so we're in a market just like any other tenant is in the market. and what landlords will charge is in this 8% range. we do our best to negotiate something lower but that's where the market stands. i've talked to -- about this concept of could we find a different mechanism to self-finance improvements. we have found where new york city did accomplish that, but it's on a much grander scale. so if there is the possibility perhaps to bundle properties, that might get us enough heft of what we want in debt, and perhaps get a decent return but for small agreements it's very difficult to do anything other than what we're presenting to you at this 8% rate. we are -- i do want to make
mention though that our rough order of magnitude budget at this point has us considerably below what our availability of funds is at 35 a square foot, we're probably 80% of that and we're seeing already value engineering opportunities where that number will only go lower. but in abundance of caution we're providing you numbers that assume full amortization of the entire 35 a square foot. >> president chiu: supervisor campos. >> supervisor campos: thank you, mr. president. thank you for your presentation. just a quick question, just an informational question. there is a way to keep track of how much the city is spending on these kinds of improvements, collectively? i don't know how many of these deals we have, where we're actually, you know, paying or borrowing the money at this interest rate. but to the extent that the
individual agreement, you know, is de minimus in terms of the amount, it might be useful to just keep track so that we at least can consider different ways of dealing with them collectively. >> that's an excellent idea. i'm sure we can work with the controller's office to put together a working matrix as we go forward. >> president chiu: any additional question to city staff? thank you very much. let me ask if there are members of the public that wish to speak on this item. seeing none, public comment on this item is closed. and colleagues, unless there is further discussion, this hearing has been held, and i will close it and file it. and we have in front of us items 9, 10, 11. why don't we -- unless there are additional comments, let's take the items in order. madam clerk, could you call the roll on item 9. >> the clerk: supervisor cohen, aye.
supervisor elsbernd, aye. supervisor ferrell, aye. supervisor kim, aye. supervisor mar, aye. supervisor olague, aye. supervisor wiener, aye. supervisor avalos, aye. supervisor campos, aye. president chiu, aye. supervisor chu, aye. there are 11 ayes. >> president chiu: the resolution is adopted. item 10. >> clerk calvillo: item 10, supervisor cohen -- >> president chiu: why don't we do this same house, same call. without objection this resolution is adopted. item 11, same house, same call. without objection this item is adopted. madam clerk, could you please read the in memories. >> clerk calvillo: today's meeting will be adjourned in memory of the following individual, on behalf of supervisor carmen chu for the late esther -- >> president chiu: any more business in front of the body?
today we are at recology. they are celebrate 20 years of one of the most incredibly unique artist residency programs. we are here to learn more from one of the resident artists. welcome to the show, deborah. tell us how this program began 20 years ago. >> the program began 20 years ago. our founder was an environmentalist and an activist and an artist in the 1970's. she started these street sweeping campaigns in the city. she started with kids. they had an exhibition at city hall. city officials heard about her efforts and they invited her to this facility. we thought it would coincide with our efforts to get folks to recycle, it is a great educational tool. since then, we have had 95 professional artists come through.
>> how has the program changed over the years? how has the program -- what can the public has an artist engage with? >> for the most part, we worked with metal and wood, what you would expect from a program like ours. over the years, we tried to include artists and all types of mediums. conceptual artists, at installation, photographers, videographers. >> that has really expanded the program out. it is becoming so dynamic right now with your vision of interesting artists in gauging here. why would an artist when to come here? >> mainly, access to the materials. we also give them a lot of support. when they start, it is an empty studio. they go out to the public area and -- we call it the big store. they go out shopping, take the materials that, and get to work.
it is kind of like a reprieve, so they can really focus on their body of work. >> when you are talking about recology, do you have the only sculpture garden at the top? >> it is based on work that was done many years ago in new york. it is the only kind of structured, artist program. weit is beautiful. a lot of the plants you see were pulled out of the garbage, and we use our compost to transplant them. the pathway is lined with rubble from the earthquake from the freeways we tour about 5000 people a year to our facility, adults and children. we talk about recycling and conservation. they can meet the artists. >> fantastic.
let's go meet some of your current artists. here we are with lauren. can you tell us how long have been here so far and what you're working on? >> we started our residency on june 1, so we came into the studio then and spent most of the first couple weeks just digging around in the trash. i am continuing my body of work, kind of making these hand- embroidered objects from our day-to-day life. >> can you describe some of the things you have been making here? this is amazing. >> i think i started a lot of my work about the qualities of light is in the weight. i have been thinking a lot about things floating through the air. it is also very windy down here. there is a piece of sheet music up there that i have embroidered third. there is a pamphlet about hearing dea -- nearing death.
this is a dead rabbit. this is what i am working on now. this is a greeting card that i found, making it embroidered. it is for a very special friend. >> while we were looking at this, i glanced down and this is amazing, and it is on top of a book, it is ridiculous and amazing. >> i am interested in the serendipity of these still life compositions. when he got to the garbage and to see the arrangement of objects that is completely spontaneous. it is probably one of the least thought of compositions. people are getting rid of this stuff. it holds no real value to them, because they're disposing of it. >> we're here in another recology studio with abel. what attracted you to apply for this special program?
>> who would not want to come to the dump? but is the first question. for me, being in a situation that you're not comfortable in has always been the best. >> what materials were you immediately attracted to when you started and so what was available here? >> there are a lot of books. that is one of the thing that hits me the most. books are good for understanding, language, and art in general. also being a graphic designer, going straight to the magazines and seeing all this printed material being discarded has also been part of my work. of course, always wood or any kind of plastic form or anything like that. >> job mr. some of the pieces you have made while you have been here. -- taught me through some of the pieces you have made while you have been here. >> the first thing that attracted me to this was the printed surface. it was actually a poster. it was a silk screen watercolor, about 8 feet long.